Judgment:
ORDER
SHEET IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction ORIGINAL SIDE GA No.3258 of 2016 WP No.992 of 2002 PLASTOIENE POLYMERS PRIVATE LTD.Versus UNION OF INDIA WP No.992 of 2002 WP No.1076 of 2007 WP No.1077 of 2007 WP No.1779 of 2004 WP No.1780 of 2004 WP No.238 of 2003 PLASTOIENE POLYMERS PRIVATE LTD.Versus UNION OF INDIA BEFORE: The Hon'ble JUSTICE DEBANGSU BASAK Date : 25th April, 2017.
Appearance: MRS.Debjani Ray, Adv.Mr.Rabi Prosad Mookerji, Adv.Mr.Amitesh Banerjee, Sr.Adv.Mr.Arindam Mondal, Adv.Mr.A.Rao, Adv.Mr.S.Sen, Adv.The Court :- Six writ petitions are taken up for hearing analogously as they are by the same petitioneRs.The six writ petitions are against the customs authorities.
The six writ petitions are WP No.992 of 2002, WP No.238 of 2003, WP No.1780 of 2004, WP No.1779 of 2004, WP No.1076 of 2007 and WP No.1077 of 2007.
The petitioners had obtained an interim order in WP No.992 of 2002.
It had obtained release of materials on the basis of bank guarantee and an indemnity bond by virtue of an interim order.
The Department did not prefer an appeal against such interim order.
At the time of hearing the writ petitions, it was found that, the bank guarantees concerned were allowed to be lapsed.
In other words, the petitioners did not have the same renewed.
Finding such appalling situation, the Court had directed the concerned bank to appear.
The bank had chosen to make good the bank guarantees and had made over the proceeds to the Bank to the Department.
The bank guarantees had covered a portion of the claim of the Department.
The other portion of the claim of the Department was covered by the indemnity bond executed by the petitioneRs.The value of indemnity bond was Rs.1, 28,85,129/-.
The indemnity bond presently is of no value inasmuch as the Department is not in a position to execute the same and realize the proceeds thereof.
None of the petitioners are to be found.
DiveRs.orders were passed from time to time in the writ petitions from February 10, 2016 to ensure the presence of the petitioners so that indemnity bond executed by them is made good.
The orders were passed on February 10, 2016, February 17, 2016, March 10, 2016, March 18, 2016, March 30, 2016, March 31, 2016, April 22, 2016, May 11, 2016, June 29, 2016, September 8, 2016, November 15, 2016, December 21, 2016, February 14, 2017 and March 14, 2017.
Efforts were made to secure the personal appearance of the natural persons who are involved with the fiRs.petitioner.
The fiRs.petitioner is a limited liability company.
Efforts were made to have the police authorities produce the Directors of the fiRs.petitioner in Court.
Such efforts did not bear any fruits.
The Department had filed a complaint with the police authorities, which were initially noted as a General Diary.
Subsequently, after lapse of more than ten months, the Department had filed another complaint, which apparently was treated as a FiRs.Information Report.
The less that is spoken about the complaint lodged by the Department, which was initially noted as General Diary and the subsequent complaint, which was treated, as FiRs.Information Report, the better.
Nonetheless at the prodding of the Court, and upon the State Advocate being requested to have the petitioners produced in Court, the State had extended its full co-operation.
Despite their efforts the second petitioner and the persons connected with the fiRs.petitioner could not be produced in Court.
The Department took no steps to have them produced.
During the couRs.of hearing, it had come to the notice of the Court that, the fiRs.petitioner was conducting proceedings in other cases including Tribunals.
Such information was passed on to the Department.
It was for the Department to take such steps so as to keep itself abreast of the proceedings undertaken by the petitioners rather than the Court informing the Department of the pendency of the proceedings and the steps to be taken thereat.
It was only after sufficient prodding from the Court that, the Department started taking small steps with regard to the proceedings initiated by the petitioners before the Debts Recovery Tribunal and at other forai.
The Department made no effort to contact the advocates of the petitioners such cases or to seek the whereabouts of the petitioners or to find out the assets of the petitioners from which the indemnity could be realized.
The Department also made no effort to find out the natural persons involved with the fiRs.petitioner.
From time to time the Department had filed affidavits, voluminous at that, to establish ostensibly the steps taken by it against the petitioneRs.Such affidavits apart from generating voluminous papers is devoid of any materials, in the sense that, it re-emphasizes the failure of the Department to take steps to secure the realization of the indemnity bond from the petitioneRs.The Department has not taken appropriate steps to realize the indemnity.
It has not applied for insolvency of the natural person involved and the bankruptcy of the legal entity involved.
The Department justifies its conduct by stating that, all assets of the petitioners are hypothecated and, therefore, the Department is not in a position to proceed against them.
The Department ought to have been more vigilant while accepting the indemnity bond.
The Department did not look into the net assets available to the person giving the bond for a sum in excess of Rs.1 crore.
It had accepted such indemnity bond without understanding the net value of the person giving it.
The Department on the basis of such indemnity bond has allowed the petitioners benefit.
The net result is the Department stands to lose a sum in excess of Rs.1 crore.
None appears for the petitioneRs.The learned Advocate appearing for the petitioner had prayed for leave to retire.
Such leave was not granted.
I find that, on every dates of hearing as noted in the order-sheet, a representative of such advocate-on-record was present in Court to watch the proceedings.
However, such representative did not appear when the matter was taken up for hearing.
The Department stands to lose a sum of Rs.1,28,85,129/- in WP No.992 of 2002.
Such loss will fall upon the tax payers for no fault of them.
It is the lackadaisical attitude of the personnel who manned the Department at the relevant point of time which has led such a situation to come such a pass.
Therefore, it would be appropriate to direct the Development Commissioner to realize the sum of Rs.1,28,85,129/- together with interest at the rate of 18% per annum calculated on and from June 4, 2002, being the date of the indemnity bond, till realization, from every personnel involved in this matter.
If such personnel has retired, appropriate step for recovery should also be undertaken apportioning the liability from such retired personnel.
The Development Commissioner will undertake and complete the calculation and ensure the realization of the same as expeditiously as possible.
WP No.992 of 2002 with GA No.3258 of 2016 and WP No.238 of 2003 are disposed of.
Needless to say, all interim orders passed therein stand vacated.
Two writ petitions being WP No.1779 of 2004 and WP No.1780 of 2004 relate to claim on account of interest due to delay in payment made by the Department.
None appears for the petitioners in the matter.
In such circumstances, WP No.1779 of 2004 and WP No.1780 of 2004 are dismissed for default.
All interim orders passed therein stand vacated.
None appears for the Department in WP No.1076 of 2007 and WP No.1077 of 2007.
It is sad that none appears for the Department despite the matters being taken up for about a year.
Considering the gravity of the situation as noted herein, it would be appropriate to direct the personal presence of the Development Commissioner of the Falta Special Economic Zone on May 3, 2017 to explain as why none appears for the Department and the steps taken by him to correct such situation.
(DEBANGSU BASAK, J.) snn/TR